Williams Offgas Business in the Oil Sands Presentation to CSGWest, Energy and Public Lands Committee July 22, 2012 By Lorraine Royer, Manager, Government Affairs Williams Energy Canada
Williams > Energy infrastructure company focused on connecting significant hydrocarbon resource plays to growing markets Natural gas, NGLs, Olefins Operations span from Gulf Coast to Canadian oil sands Midstream gathering and processing plants provide petrochemical feedstocks 15,000 miles of interstate natural gas pipelines deliver more than 14% of natural gas consumed in the United States > More than 100 years operating experience 2
Putting GHG emissions in context OECD Europe 17% NonOECD Europe & Eurasia 9% Japan 4% Transport 27.4% Industrial Processes & Waste 9.8% Agriculture & Forestry 8.4% China 24% India 5% Oil Sands 6.9% Canada Australia/New Zealand 2% Residential 5.9% Other Fossil Fuel 16.0% United States 18% Other 19% Manufacturing, Commercial & Construction 11.5% Electricity & Heat Generation 14.1% Sources: 1. U.S. Dept. of Energy/EIA 2. Environment Canada GHG emissions from oil sands: just over 1/1000th of global GHG emissions 6.9% of Canada s GHG emissions 26% reduction in intensity from 1990 3
Governments and industry are: Reducing GHG Emissions > Using less energy input > Using energy more efficiently > Carbon regulation with pricing Mandatory 12% reduction Carbon price since July 2007 Capturing CO2 > Governments investing over $3 billion partners with industry Encouraging and funding technology and innovation > Alignment of lower cost and lower environmental impact g co2 eq./mj 25 20 15 10 5 0 Oil Sands GHG Emissions/bbl 26% 1990 2010 4
Williams in Canada 5
Chemistry Common Name Chemical makeup Methane (natural gas) Ethane Propane Butane Bitumen C1H4 C2H6 C3H8 C4H10 C2000+ Short name C1 C2 C3 C4 6
Propane (C3) C 3 H 8 H H H H C C C H Known as a paraffin H H H TD Calgary Energy Conference /July 11, 2012 / 7
Propylene (C3=) C 3 H 6 H H C = C C H H H H Known as an olefin or a basic petrochemical TD Calgary Energy Conference /July 11, 2012 / 8
Petrochemicals NGL (Paraffin) Olefin Derivatives (Plastics, etc.) Ethane Ethylene Polyethylene, ethylene glycol, etc. Propane Propylene Polypropylene, propylene glycol, etc. Butane Butylene Rubber, gasoline, etc. 9
Oil sands offgas > Byproduct of upgrading bitumen is a gas (offgas) Offgas contains approximately: 20% hydrogen 40% methane 40% NGLs and olefins Sulphurs > Offgas can either be used as fuel in the upgrader or processed > Processing offgas removes higher value NGLs and olefins > Processing offgas results in significant environmental benefits Reduces CO 2 and SO 2 emissions More environmental pressure = more desire to process offgas TD Calgary Energy Conference /July 11, 2012 / 10
Environmental benefit The capture and processing of offgas is, and will, result in significant environmental benefit Currently at upgrader: CO 2 emissions reduced 0.2 million tonnes/year (> 0.1M net)* SO 2 emissions reduced 4,000 tonnes/year If next three upgraders capture offgas: CO 2 emissions reduced 1 million tonnes/year (> 0.5M net) SO 2 emissions reduced 10,636 tonnes/year That future CO 2 reduction is 10% of Alberta s commitment under its Specified Gas Emitters Regulation (SGER) * Source: Pembina Institute study. Based on forecasted volumes at upgraders that are subject to change 11
Plenty of offgas liquids to recover today and tomorrow NGL / Olefins Volume (Mbbl/d) 220 200 180 160 140 120 100 80 60 40 20 Barrels from expansions and new upgraders Existing barrels beyond Williams current operations Future barrels at existing Williams operations (ethane recovery) 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 Barrels at existing Williams operations (C3+)
Fort McMurray Offgas Processing 10
Redwater Fractionator, Storage and Distribution 14
Summary > Good news story regarding oil sands: Valuable commodities extracted from offgas SO 2 and CO 2 emissions reduced significantly Higher value products available for more value add in Alberta: Longterm jobs Spin off economic effect Taxes 15
Thank you